Financing Your First Home

provided by ell brown via flickrMany people in their 20’s, when they start out on their own, want to live at the same lifestyle at which their parents currently operate. They are used to having money to pay for everything they want to do. Imagine the difficulty of trying to live at the same lifestyle with significantly less income. One of the major areas that this is seen is buying a home. Young people these days are buying a home earlier than ever before. Having less income doesn’t mean that you can’t enjoy some of the same things, like owning a home. While it may be difficult to buy a home right out of college, it isn’t impossible. After all, many people are doing it. Although, I suspect it is those that have taken the time to use a calculator mortgage.

Options in Obtaining a Mortgage

Beyond having a high income, there are many ways to get a mortgage. Having a modest income doesn’t disqualify you. I would like to believe it is the people who think outside the box who are able to obtain a mortgage. After doing calculations of what you can afford each month, it is also important to be creative in your financing options. One way to finance your new home would be to use a buy to let mortgages calculator. This would consider other factors beyond your salary in order to find a way to find a finance the home of your dreams.

If you are lacking credit (and think it would be hard to qualify for a loan) and you have a decent salary, another creative tip would be to consider finding an older friend (who may be in retirement or close to it) or a relative that is willing to loan you the money. They would serve as a lender and you can pay them monthly payments with interest. As long as you are reliable, a reasonable interest rate would offer the friend/relative a secure investment that would beat any other investment they have and it would offer you a way to get into your house a couple years earlier.

If you do your homework and you are committed to making it work, almost anything is possible. If buying your first home is one of these dreams, why not be creative to make it work.

5 Responses to Financing Your First Home

  1. In Canada we can use up to $25k from our RRSPs to help with a down payment. What I did was contribute a big chunk of money, got the tax benefits by waiting 60 days to withdraw the funds, then use the money for my down payment. I then have to pay that back over 15 years. A neat program.

  2. One thing to consider as a first time home buyer is the amount of your down payment. In order to avoid PMI you will need to put down at least 20% however with the prices of real estate plummeting it is possible to do. Also make sure you hire your own competent home inspector to check out the condition of the mechanical systems and structure. I would also ask the seller to provide a 1 year home warranty prior to closing.

  3. […] And finally 20s Finances posts Financing Your First Home. […]

  4. Jonathan says:

    We were fortunate enough to find a great home that sported everything we want at a very nice price. I specifically looked for a house that would have a monthly payment amount that is only around 5-8% of my income each month. That way I can make huge payments and have it paid off way early.

  5. I would have to say that nows the time to be buying a home. Prices have come down a lot in most area’s of the country. Mortgage rates are now under four percent when was the last time that happened 1950’s. I can picture the young couple so very nervous about qualifying for that first mortgage having picked out their first house than the banker tells them that their credit isn’t quite up to par so their sorry but they cannot give them the loan. Quite a shock don’t you think.